welcome to "worldwide exchange." i'm julia chatterley. these are your headlines from around the world. shares under pressure on reports that german lender has begun settlement talks with the u.s. over position sanctions violations. airline stocks drop as air france slashes earnings. the airline is being hit by overcapacity on longer routes and cargo demand. an unhealthy outlook. philips warns its health care division will make forecasts as

the ceo of the unit steps down. samsung flags up a sharp drop in profits for q2 as consumers in china and europe hang up the hand set. >> announcer: you're watching "worldwide exchange," bringing you business news from around the globe. a warm welcome to "worldwide exchange." u.s. regulators look to be turning their sights on germany on a crackdown on some of europe's biggest banks. they have begun settlement discussions with commerzbank. the bank could be facing a fine around $500 million as part of the settlement. i believe in their latest financial accounts, they've provisioned around 930 million euros for this. given what we've seen from bmp,

what does this turn out to be the size of the fine? moving on, air france has cut its guidance. the profits this year could be 12% lower than expected, mainly as a result of overcapacity. shares are trading lower, bringing down other airline stocks in sympathy. we've got aig down just shy of 3.75%. ez jet lower by 2.5%, too. i guess we shouldn't be surprised given what we've heard from lufthansa this quarter already. >> absolutely. the reasons we're given this morning are almost the same as the reasons given two weeks ago by lufthansa. resulting in lower prices on lower margin, air france says that the overcapacity is quite important on north atlantic and asian routes.

stressing the level of bookings for the summer period. france says it's going to -- its new guidance is 12% lower than the previous one. it's targeting a growth operating profit between 2.2 and 2.3 billion euros for the year. that's compared with the previous guidance of 2.5 billion euros this year. they're suffering from the challenging situation with one of the airlines which has been blocked by the local authorities due to currency related dispute. the government requires airlines to sell certificates in the local currency. air france says that $290 million of revenue are blocked until the dispute will be resolved. now, on a positive note, air france insisted that, first of all, despite the 12% drop in the guidance, the ebitda will be 20% higher than last year and that

the debt target remains unchanged. air france plans to reduce its debt burden to 4.5 billion euros by tend of next year, mainly thanks to the cost reduction plan implemented by the airline. nevertheless, the stock is trading 4.3% lower right now and it comes to up more than 3% decline on the session yesterday. over to you. >> thanks, stephane. philips was warned investors its second quarter earnings will miss forecasts. the ceo of that unit is also stepping down. in a statement, the performance of the division has been disappointing, agd he would be implementing a new manager structure in health care due to its performance. weak demand for samsung as well as low competition from the competitors. >> samsung earnings guidance for

the second quarter is showing operating profits at 7.2 trillion yuan. this is a significant drop from its 10.2 trillion yuan in the third quarter of last year, which was its peak. this is also its third straight quarter of declining profit. revenues for the second quarter are estimated at 53.1 trillion yuan, also down 10% year on year. anything below 8 trillion yuan in operating profit was seen to be an earnings shock. samsung has admitted that this is true as a number of bigger expectations as this drop is cutting from weaker sales from its mobile business which continues to see stiffer competition both by apple to the upside and chinese manufacturers to the downside, including manufacturers like shaumi and a strong yuan didn't help out, either. but what samsung says about outlooks in the third quarter is

that it is expecting a recovery, again, repeating this from the first quarters earnings released, less reliance on the mobile business and increasing demand for tvs and displays are expected to help out this time around. they also hinted that its new product will be coming out and this is expected to help the third quarter numbers, as well. also, a stronger yuan, which was one of the main factors in second quarter's earnings expectations miss is seen by samsung to be less of a -- for the third quarter. global consumer electronics industry joining us now. nichola, still, 60% of their revenues comes from mobile at this stage. are we looking at a more attractive period of decline for samsung here, do you think? >> i think definitely you're going to see deteriorating situation and operating

environment in mobile. like you mentioned before, there's a lot o companies looking to become a lot more competitive than they have been in the past. in the past, if you were buying basically a mobile phone, in most countries, you were most likely choosing a samsung. but now we see a lot more competitive product lineups, not just from companies looking to come back line sony, lg, but also looking at shao mi, some of the smaller companies and those are coming into some oovt lineups. >> we've got the likes of lenovo and others moving up the quality curve. on the top end, we have the iphone 6 coming out. do you expect the market share to be cannibalized on both ends

here? >> i believe that that is part of it, but i don't think the iphone is as much of this story as it has been, maybe, in the past. by now, basically, whatever shares apple could take from samsung has already been done. this is much more of a story that it has happened. now it's a story about these new up and commerce taking shares away from samsung. in q2, what was the expectation for that pushing forward, too? >> i think that's what really they thought put a damper on some of the declining revenues and profitability in the second quarter, especially coming from the mobile division. so they thought that tvs would really -- especially because of the world cup, they would put a damper on that. but that largely hasn't really

materialized. and we do expect about a 3% increase in the overall tv market this year. but basically, if they want to return to profitability, they're going to have to do quite a bit more cutting. we're going to see quite a bit more of what we've seen in the past from the japanese manufacturers. they announced today that they will cut the production of their screen and similar moves may have to follow. >> how much damage has the strength of the currency done, too? it's trading at six-year highs to the dollar. do you get any sense of what they're expecting from that in q3 and q4 and whether or not they're hedged? >> well, it's really sort of out of control for the large part. the bigger concern is for the longer picture.

so whatever happens in q3, i think the most important is will these sales gains, especially in tvs that they made in q11 and hung on to a little bit likely in q2, are these sustainable? if so, how long? how badly is he losing in the mobile division? it's not so much volume sales for samsung are declining. it's also that the average selling prices are declining because growth in developed markets and for the -- for some of the larger, more profitable emerging markets has started to slow down significantly. this year its under 20%. these are all -- this is all growth that's been driven largely by mobile devices that are going to some of the poorer emerging markets. so this is what really bring

pressure on samsung more than any currency fluctuations that they can't really do much about. >>. >> we spent a lot of time talking about the problems that they have right now. some analysts say we should be selling off the camera division in particular. is that a problem for investors still? >>. >> the succession story, there's not much they can do in terms of very quick, snap divisions that will reverse the decline in profitability. what we have to also keep in mind is that a large part of profitability was due to samsung's compared to everyone else who is making android phones over the past few years. now the playing field has leveled quite a bit. and whether anyone thought that

was sustainable i don't think is the big question, but the question is can they produce the next it product such as galaxy phones and wearable. but streamlining operations, especially in the division, and possibly selling off or winding down operations in the camera division, that could be steps that could improve profitability in the short to medium term. >> we'll wrap it up there. thank you so much for talking to us this morning. and for those of you out there who think kids use their smartphones too much, take a look at this. one japanese city, the education

board has asked high school students not to use them phones after 10:00 p.m. and to turn them over to adults until 6:00 in the morning. but it's just a recommendation, so there's no penalties if parents don't comply. or if the children don't comply, either. i'm not sure how will that would go over in one of the european countries. moving on, italy must act fact on reform while problems remain low. will those countries listen? stay tuned. we needed 30 new hires for our call center.

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welcome back to "worldwide exchange." the stoxx europe 600 down by 0.3%. we are trading on the session lows this morning. it seems to be a bit of consolidation continuing ahead of earnings season late this week. air france is weighing on a number of airlines stocks across the markets, the likes of easyjet creating preb injury this morning, too. concerns they're moving towards the u.s. authority sanctions.

weaker exports and import numbers this morning, twoob on the back of the industrial production numbers, the weaker retail sales. so a number of elements pointing to a softer q2 here. it's still going to be better than those names. quick check on the asian markets, sideways news across these markets this morning. the shanghai composite managing to gain here. over in australia, too, just shy of 0.2% closing down in that session in particular, too. we have had a focus on samsung. we've just been talking about that, too. operating profits over 24% in the three months to june. in particular, taking a quick look at the nikkei, underperformer down 0.4%. it reached six-month highs last week, of course, and we're just coming off those levels. 15,300 right now wsh around that level. euro/dollar, still trading around that 11.36 level.

draghi has to do something about the crazy, i quote, level of the euro right now. the outperformer was the aussie up 0.3% after the rbs governor leaned on the currency strength this morning to business data. coming out slightly stronger in this morning's session, too. what else is going on today? eu countries will only be allowed flexibility over therefore budgets if they can demonstration long-term reforms being kwlemted. the message is from the euro group president jerome. annette, when we think of reforms, we think of italy right now. we knew parliamentary elections were going to make more difficult. the likes of berlusconi's party, too, trying to short their own support. how are they managing to get by in the reforms? what does the finance minister

have to say? actually, the finance minister seems to be quite confident. they are saying it's one of the reform agendas. but i was wondering whether this is lip service or whether they're really delivering. that is what a lot of people are missing from the eye tall yaps to really deliver. they are very good at doing marketing when it comes to their reform efforts, but they're not too good to implement things. they are, to be fair, not the only ones not too good to implement stuff. but now the focus is on italy. >> we have a government pushing for reforms. he's ambitious, but it's realistic at the same time. if they're growing discontent between your government and the

german government. we were hearing that in the press recently. mr. renzi was hinting at the bendus bank president that he doesn't like his interference between power and politics. >> as far as the german government is concerned, we are absolutely on the same line. mr. renzi with madam merkel and my relationship with mr. schobel is very good. we wrote an article together. so we're exactly on the same line. there is no disagreement. >> no disagreement on the notion of flexibility because he does not want to have more flexibility or stability in growth pack. >> there is full agreement that the way to boost growth in europe is through structural reforms. . >> we are delivering on structural reforms in italy and

my purpose as chair of the european presidency for this semester is to help all countries to find incentives and pressure to reform. we all need to have a reform agenda. >> so, you see, julia, delivery is key. >> what he had to say was about the italian reform efforts. >> i think they're very ambitious. i, like you, am waiting for results. the same goes for the eurozone, needs to speak up, needs to become a lot stronger and i think the italian presidency has th that. >> do you think the italians enough pressure for reform?

>> no. but if you look at unemployment figures, that will tell you a story. a lot of work needs to be done. italy has been showing almost a zero growth productivity for many years and that has to improve for the economy to become stronger. >> are you also discussing in the end that the word will go up and that burden will be becoming very painful for a lot of european nations? >> we're talking about allowing us time to get this done. that we should use that time. you know the expression, don't waste a good crisis. well, let's not waste a good recovery. we're in a phase of recovery. we should use this period to get some work done in terms of

reform. if the yields do go up, we're ready to carry that. >> julia, from the german perspective, i can only say structural reforms which are really effective and kind of hurting in terms of losing social welfare, we had it in germany and probably need to see that also in other countries in the eurozone, such as italy. with that, back to you. >> thanks so much, annette. to quote him, don't waste a good recovery. don't waste a lackluster recovery b with too. prime minister abe became the first leader to address parliament saying they should launch a special relationship. japan is australia's second largest trading partner after china. and the two are due to sign a free trade agreement during abe's trip this week. tony abbott was careful to point out that the partnership was not

to try and contain china's rising influence. >> australia welcomes japan's recent decision to become a more capability strategic partner in the region. i stress, ours is not a partnership against anyone. it's a partnership for peace, for prosperity and for the rule of law. >> now, crumb cup cakes which went public a few years ago is now shutting its doors in the u.s. it went public in 2011 selling giant cup cakes. the firm will close around 65 stores in the u.s. days after it was delisted from the nasdaq. so if you consider this the moment the cup cake bubble popped, what will be the next fashionable food product? let us know your tips by joining the conversation here on "worldwide exchange."

cnbc.c cnbc.com, @cnbcwex or direct to me. let's take a look at what's coming up on today aes show. what are we expecting from making bad money betts? also, smoking out the drought. we hear about damage being done to california's water supply by the growing marijuana industry. and you can't park there, sir. we're bringing you the legislation clamping down on acts designed to help you find that parking spot. coming up, marks & expenser says its new website is to blame for poor sales. are you buying that? stay tuned, we'll bring you all the details.

bank shares are under pressure after reports commerzbank has begun talks with the u.s. over possible sanctio s violations. air france says its numbers are being hit on overcapacity on long routes and cargo demand. philips warning its health

kir division will -- forecasts. and blame it on the website. m&s says the transition to its new site has contributed to a 12th consecutive drop in sales as investors gear up to move forward. >> quick check on the european markets this morning. a bit of consolidation as we head towards the earnings season. we've got consumer confidence and alcoa to watch for. we had german export and import data which perhaps is weighing on the market today. we had industrial production data yesterday. it is seemingly gearing up for q2 in germany.

euro/dollar, still sitting around that 1.36 level. we are seeing some movers here, aussie/dollar, the strong business confidence this morning. marks & expenser is blaming its new website for its drop in merchandise sales. it is clothing, footwear and home wear divisions fell by 1.5%. we've got helia with the details. good morning. take us through the details. it's all about the website. >> what details do you need to know? if you had read it three years ago, you can read it again today. another quarterly update, another disappoint in closing. internationals doing well, in the bad at all, but highly irrelevant. yet again, general mts has gone

down and the glitch that we're talking about is an 8% drop, 8.1% drop in its online sales. this is a major issue for m&s. as you said, this game should be in the venues at whimbly stadium later today trying to persuade shareholders. for the last three years, he hasn't just been -- around pretending he's going to get to 11 billion in profit while, in fact, he's seen profit reverse, seen competitors take over, quite grim i would think for shareholders today. >> as far as the website was concerned, he said it would take six months to solve and that was back in february. is it going to be fine after that, tony? >> i think it would take a long time to do. >> unfortunately, if your sales aren't working in store, on the website is not going to solve it, either. there's two issues. the product, clothing products

in particular is still trying to find where it stands in the market. clothes has changed around its positioning a lot of times. the other thing is it's difficult to do home delivery kind of stuff. i thought it would be a lot less than that. >> ultimately, marks & expenser says online still representatives a small amount of their business. marks & expenser has a sprawling real estate portfolio across the uk. many of those shops in the wrong place at the wrong time and with leases they can't get out of.

this snots something thakdz be magiced into perfection and it's upwards only growth. but the words that you used was that m&s was quite focused, it was quite specific. and where m&s general merchandising or clothing sales is it hasn't been able to speak to the uk consumer in the way that it used to. >> it doesn't have an identity. you know what you're getting with the food. it's comparable. but you never know what to expect when you go in store. and we can't show this to you, but you took some absolutely classic pictures of things that are in there right now and they are multi colored skirts and rah-rah pink skirts. >> you are so dismissive of my latest fashion buzz. it's terrible. but in ten years, we have kind of fashion praise for belinda earl's collection last year. but beyond that, it's bven very

difficult for m&s. part of it is about that core contingent that used to go to marks & expenser. does that shopper even exist any more? has that generation disappeared? >> i think you have capacity issues, as well. this has been going on for nearly 20 years. one quarter's figures are not going to solve the problem. but in that time, the value end of the clothing market has done from about 5% to about 30%. online is probably 10% to 15% of the markets. it's difficult. >> investors at the atm, what's your view on the stock? >> i'm not a fan. realistically,s has to be given its time to work its way through. so i'm neutral for the story. >> 20 years it's been trying to do this turn around. tony, thank you for that, senior

retail analyst and helia, of course. now, investing in india isn't as easy a task as carrefour has just found out. the world's second largest retailer be sales is set to shut down its india operations from september. the effort is part of a plan to revitalize its domestic business. the government opened up sales to the market back in 2012. elsewhere, carmakers in china saw strong sales in june. ford sold almost 88,000 vehicles, 17% more than last year. general motors was up 9% to over 250,000 cars. now, it looks like macau is going to hold on to an informal referendum for democracy. currently, 400 officials elect the leader of the region of china. the referendum asked whether they want to choose the leader

by universal suffrage in 2019. he's expected to keep his role in a vote on august 31st. the japanese prime minister shinzo abe is currently visiting tony abbott today. >> hi, julia. prime minister abe is visiting maybely to sign bilateral free trade agreements as well as cooperation. abe signed the agreements this after. at a meeting, abe spoke in front of parliament this morning, becoming the first japanese prime minister to deliver a speech there. he said the two countries launching a eu special relationship of cooperation on areas such as defense. abe is pushing for a more active security role as he eyes china's rapidly growing military

presence in the region. they he'sed a ban on military exports in april, allowing japan to form the rally today. he's scheduled to return home on saturday. julia, back to you. let's give you a look at what's on the agenda in asia tomorrow. the big issue with the the markets. wednesday will be closed for the election and a winner may be declared by the end of the day. shinzo abe continues its tour of australia. this time he's in perth. china may be the second largest economy, but it occupies a number of firsts in many areas, including the energy sector. sri jegarajah explores why this

will have a huge effect on the global energy industry. >> china is the world's top energy consumer and coal user, projected to use more coal in the coming years than the rest of the world combined. its holds the dubious honor at the greenhouse gas and mixer. but it owns the world's largest renewable energy system, part of its push to diversify its energy supply and keep its environment clear. energy security and development. it must be balanced. but which country has slightly different priority, right? india, the growth is more important. china has developed to the stage that they have to think about the air pollution by coal. >> but while green is in, china has invested too much in coal

power to abandon it just yet. >> coal on china will be able to get away from coal. i think that's going to be a long, long time. the reason for that is very simple. the coal fire positive nation is you cop assume half the coal in china. those reasons are locked in. that is going to last for 40 years. >> what china needs to do, more energy efficiency. to make this happen, get rid of that so-called consumption subsidy. that helps that public spending or waste the energy sources by setting the price lower than the global price. this is very tricky. sometimes it's not popular, so it's difficult to do. but that is the best way to make energy efficiency happen. >> the problem lies not just with china, it's asiawide.

asia pacific produces approximately 10% of global energy, yet consumer around a third of the supply every year. the asia development bank projects energy demand in the region to almost double by 2030 with hydro carbon supplying the wattage. >> asia hopes diversifying its energy mix will go some ways to making supply more secure. gas will be a key component. the international energy agency expects china's gas demands to double over the last five years. >> if you look at the hydro carbon balance, gas is the fuel of the future. so it's a matter of time and costs. gas, unlike oil, doesn't have opec there driving up the price. which is a major consumer of gas which china and india will be. and to your future, it's very good. >> at the world's biggest energy

market, asia holds the eastern promise for energy producers worldwide. but analysts say its long-term future depends on their ability to produce. voe jegarajah, cnbc. an executive working for fifa's hospitality provider has been arrested by brazilian police for allegedly helping scalpers illegally sell tickets. the governing body uses to sell packages for the game. he's accused of obtaining tickets mebts for teams and guests. the game tonight between germany and brazilian isn't

clear cut. he changed direction and gobbled up the brazilian sardine in just one gulp. what does that say about the game? overtime, penalties? who knows. brazil takes on germany at 22:00 cet. they will have to do without neymar who broke his collarbone in the last clash. now, with casino revenue declining almost every month for the past eight years, is the game up for atlantic city inspect morgan brennen has the story. >> take a look behind me. over my left shoulder, the showboat. $2.4 billion mega resort, majority owned by tappan asset management. come next month, the showboat is closing and if a buyer doesn't materialize, that, too, could

close. these coupled with the already out of business atlantic club could end the summer with 25% less casinos than it started the year with. why are we seeing this? game has been falling sharply, down 45% since 2006 as neighboring states green light more local casinos and creating what analysts call casino saturation. that is prompting new jersey mayor chris christie to unvale a transition. the goal, to turn atlantic city into an event destination for groups and conventions. they're using las vegas as a template. several casinos have renovated and added more nongaming options. for example, paris, loeged here. but so much of this plan has

resolved around rebel. it was expected to usher in a new era for this seaside city. but now it's facing bankruptcy. it's stepping bankruptcy in the two years since it opened. that coupled with a 10% unemployment rate and a relatively high crime rate has many analysts and economists questioning whether the city can reinvest itself or whether it could be doomed to go the way of detroit. back to you. still to come on the show, dry times for high times. we'll explore the damage being done.

welcome back to "worldwide exchange." philips has warned earnings for its health care division will miss forecasts. the ceo of that division is stepping down. the performance of the division had been disappointing, adding there will be a new structure in health kir ka to improve its performance. air france says profits this

year should be 12% lower than previous expected, mainly as a result of overcapacity on its passenger roots as well as weak cargo demand. pa passengers supply was up into june. shares are trading lower, bringing down other airline stocks. as you can see there, aig, the most significant underperformer down 4.16% in trading. easyjet down 3%. lufthansa being drap dragged lower today by 2%. s&p saying there would be long-term credit risk if boeing were to close ex im bank. s&p estimates boeing's credit arm would have to find an extra

1.2 million in needs. shares in commerzbank are trading lower today after the "new york times" reports u.s., state and federal authorities have begun talks with the lender over dealings with iran and other countries sanctioned by the u.s. annette is in brussels. we're getting you on a different topic now, annette. can you give us some context in regards what sort of size we're talking about is being reportedly talked about at this stage versus provisions and profits for commerzbank last year? >> yeah. actually, that's the interesting part of it. at least what we are hearing now from the "new york times," commerzbank has booked by the end of 2013. they had 934 million euros in legal provisions on their books.

that should cover it. the question is whether it's remained with that 500 million euros. looking at the bnp case, we started off with a smaller number there which was leaked from the beginning of the whole process. so that is key looking at commerzbank. commerzbank countries to bnp can't really add a lot of their profits to cover that time, because looking at last year's net profit, it was only at 78 million euros, so already the 500 million euro is a lot more than the bank's profitability. looking at 2014, the bank is still undergoing restructuring. they're still investing a lot of money and they're still citing a lot of assets.

that is hurting commerzbank quite adversely. >> so we are talking about a 500 million euro fine. let's say it does come in at that. what are going to be the knock on effects? do you think they will talk about dividend cuts that we were anticipating perhaps for b&p. >> they can't put a dividend because they don't pay a dividend. they were promising a dividend perhaps for next year. they don't have that much leeway than bnp paribas because they are not as bad, although successful or not, that's that heavy. now their biggest problems are shipping loans. they are probably still facing some write-downs on getting rid of animal.

what they're hearing now is that they're most likely the next in line to settle with the united states and most likely also there will be something which is called the -- agreement. that means they are not going to pleat guilty, but they will, of course, pay a fine. and that is completely different from bnp paribas, which was the case which was more severe. with that, back to you. >> some great points. thank you so much for that. alan greenspan's exuberance is contributing to the bubble, but is it a part of everyday activities? >> the re1e6r7 takes a loot a who areas of the brain and how they react to activity. one area associated with awards shows higher activity as prices went up. so when that area of the brain lights up, we could be heading for a double. the other area of the brain that

they looked at may act as an internal warning signal. it could give us clues about how to potentially mitigate them. they cite warning buffett and his advice to do fearful when others are degreedy and degreedy when others are fearful. hes at least has neuroscience on his side. gm has been resisting nearly 1 million pickup trucks and jeeps being recalled for airline herb. they received about a thousand complaints. gm has told regulators rusted brake lines are part of routine

maintenance. petsmart sales have suffered due to increased competition and aging stores. the company is looking at changes including more cash to shareholders after reporting its drop in same-store sales in seven years. from cup cakes went put a few years ago and is now shutting its doors in the u.s. it was found in 2003 and went public back in 2011. the firm will close around 65 stores in the u.s. days after it was delisted from the nasdaq. if you consider this the moment

the cup cake bubble popped, what will be the next fashionable food products? let us know your tips. get in touch with us by e-mail. by twitter @cnbcwex or directly ajtchatterley as well as cnbc. we did see losses in the session in yesterday's trading session, the nasdaq down 0.8%. the russel 2k lost 1.2%. plenty of time, though, for that to change between now and the open of the markets. european markets session, we'll take a quick look adding to some of the losses over the last 20 minutes or so. we've got the german market down

0.6%. weaker export and import orders significantly weaker than the market on the back of the weaker ip data. yesterday, the retail sales and business survey. foreign exchange markets, a bit of consolidation in the dollar this morning. the big mover is the aussie regaining half the lesson we saw. we did have better than expected business server data in the session today, trading just below that 94 figure level. alcoa reports second quarter business results after the closing bell unofficially kicked off the earnings season. revenues are expected to drop 4%. investors will be listening for comments on global aluminum demand as well as the aerospace sector.

fox has reportly raised 150 million in funding from tpg which values the online storage starter at 2.9 billion tourls. it will allow box to put off an iipo. in return for the cash, the cloud will get a seat on the company's board. they now plan to go public sometime this fall. the signs have accelerated in the u.s. jobs market. the fed says the date is set in stone. about speeds and feeds.

it's all about latency. it's all about how fast does it run. i often sit with enterprises who ask me about how mission critical and how's the performance of the cloud. and i tell them, if you can make gamers happy, you can make anybody happy. speed is made with the ibm cloud.

welcome to "worldwide exchange." i'm julia chatterley. commerzbank shares under pressure on reports the german lender has begun talks with the u.s. over possible sanctions violations. walmart top executives say the u.s. jobs market may be improving, but that's not giving consumers enough confidence to open up their wallets and spend more. high frequency trading, holding another hearing today on what t practice may have on the market. >> airline stocks drop as air

france slashes its earnings guidance. the carrier says numbers are being hit by overcapacity on long haul routes and weak cargo demand. >> thanks for joining us here on "worldwide exchange." we'll check on the futures, losing a bit of ground after yesterday's losses. the nasdaq down 0.8%. a lot of the focus is on some of the smaller names, the russell 2,000 losing 1.8% in yesterday's trading session. a little bit of consolidation it seems ahead of earnings season. quick check on the european markets this morning, too, similar story, losing a bit of ground. as we've been talking about all morning, we have export and import data from germany, it follows on the back of a number of weaker readings, the likes of

retail sales, industrial production, so a bit of an eyebr eyebrow raise. keeping a focus on the airlines, too, air france coming out with a profit warning. i'll take you through those details right now. they've cut their guidance to carriers saying profits this year could be 12% lower than previously expected, mainly the result of overcapacity on its positive engineer routes as well as weak cargo demand. other airline stocks are down in sympathy. let's move on to philips, up over 1.6% today. the health care market on news in the second quarter. the company has announced the ceo deborah lonzo will now reportly into. executive. that stock up 1.6% and outperforming the broader

markets. u.s. regulators are now turning their sites on germany and the crackdown on sanctions by some of europe's biggest banks. authorities have begun settlement talks with commerzbank over germany's second largest lenders dealing with the likes of iraq and other companies that have been sanctioned by the u.s. we know they've provisioned around $500 million. quick check on marks & expenser, too, down just shy of 1%. the company this morning reporting weaker than expected earnings. they're blaming their transition to a new website for the 12th consecutive drop in general merchandise sales. they're saying sales in the clothing and home goods divisions are lower.

we're seeing a bit of conso consolidation as far as the dollar is concerned in the g-10 space. carry seems to be the play dejour. up 0.3% this morning. better than expected business survey data. actually we're gaining almost half the sessions we lost in yesterday's trading session. let's take a look at the bond markets, too. we continue to see this focus on the ten-year, 2.59% after the trading session yesterday. 1.24% the level on the bund. the finance minister of italy telling us this morning, look, the reform plans are on track and we're bringing together all the different parties that need to sign off on further purpose, particularly electoral reform. that yield is 2.83%. let's give you a look at what's on today's agenda in the united states. richmond fed president jeffrey lacker speaking about the economy at 11:00 p.m. eastern. at 3 p.m., we get may consumer

figures. after the close, we get number from bob evans and the container store. the senate banking committee holds a hearing into the role of high frequency trading case in the market. quite a few things going on today. we're now joined by michael perse, the chief global strategist at eden. talk to me about what you see going on in the markets. you're saying the s&p in particular looks overbought on the daily and weekly charts, but on a monthly basis it's probably different. so what's your day? >> well, i would just first comment that this little bit of giveback we saw yesterday and this morning and the futures, it's a function of the short-term overbroad signals that we were seeing carrying

through to the shorter week last week. so i think this part of -- this little giveback we're seeing right now is somewhat inevitable. but i think the broader question about the longer term, something you kind of referenced with the mrol charts is that it's any view the market is getting into a period of high and sustained multiple. when we've seen this before back in 1994, 1995, and on monthly charts, the -- not tooth too technical here, but the market is not yet overbought and it is capable of seeing quote/unquote overbought territories for a long period of time. certainly history has shown that. >> let's get back to what you started by saying as far as the give backs in the market.

what kind of size of giveback are you expecting? we're talking, what, 0.6% and 0.8% is nothing in the trading we've seep in the last couple of sessions. >> sure, right. and i don't think it's going to be anything too severe here. my road map going forward here is maybe we'll see a 2% to 3% off the pauk. i think if none was december, if you will, a little bit of a beta push into the year-end december quarter in june, july to some degree might be january where you have the first few days being soft, holiday week, and then you have that sort of reset from overextended sentiment. earnings season is literally kicking off tonight. i think as we get through the season, my expectations is that the earnings will come in strong

relative to expectations and that's going to, you know, save a path with more confidence and for more dish buyers to come into this market the third or fourth week of this month. so the give back will be relatively modest aspecting, you know, again, 2%, 3%, 4% would be my worst case here. >> but you said the key point there and that the expectations have adjusted significantly lower now to allow us to see them underpinning this rally. doesn't that give us a bit of cause for concern, too? >> well, you know, i think, you know, on the economic front, you know, here in the united states, there's been a lot of unusual things happening, mainly the gdp print was so severe, i think it did spook a lot of investors about what are the longer term implications of that? having said that, i think the economic data that we've been getting steadily over the last -- since april, generally, a surprise to the upside and b,

relatively consistent. i think it's consistency that in a way that investors crave here. so there are some expectations, sure, but i think if you go back through, you know, the last several quarters, companies have been able to navigate the earnings seasons really pretty well. even during that very tough first quarter 75% of the s&p 500 beat on earnings, 53% beat on revenues and the average earnings beat was a two-year high to the s&p. even the small caps eked out a modest earnings beat. so i'm expecting them to come in relatively decently. probably not fantastic, but decent enough to instill confidence that the market can get pushed to higher multiples. >> you just said that that market principals want consistency in the data. we also want to see new market participants in order to push this rally further. are they going to get that as they push into q3 now? >> well, i think that the

incremental investor that's been on the sideline has been slowly coming into this new market. six yearses and counting after the great financial crisis. my framework for sort of considering that is that i think it's sort of a slow but steady push there. to underscore this consistency, economic data, but also consistency on investor flows is also important. it's nothing dramatic here, but over the last 12 months they've been much more consistent coming into equities than they had been at any point prior going back to the great financial crisis. >> michael, thank you so much. let's take a look at today's top russian stories.

pro russian rebels erected new barricades in donetsk. president poroshenko has said the conflict is at a turning point with the government saying we'll act quickly to seize back more territory from the rebels. israel bombed more than 30 targets in the gaza strip as prime minister benjamin netanyahu pledged to do whatever is necessary to restore quiet to southern israeli community. this comes as a senior iraqi official was killed in baghdad.

hours later, four civilians and three police officers were killed in the sheenite district of northern baghdad. coming up, could commerzbank be the next european lender to face the wrath of u.s. regulators? we'll bring you all the latest in two. for our call center. i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter.com/offer2. at a special site for tv viewers; over 1.2 billion eyeballs are on us during the two weeks at wimbledon. true tennis fans want to know what's happening. they don't want to just see what's happening, they want to know and understand why it's happening.

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welcome back to with "worldwide exchange." walmart says u.s. consumers are keeping their wallets tight. hft is under the microscope. reports say u.s. authorities have begun settlement talks with commerzbank over dealings with iran and other countries sanctioned by the u.s. annette is in brussels. run us through the numbers here. it looks like provisions are enough to cover the rumor demands, but we thought that with bnp, too, didn't we? >> yeah. that's exactly the case with bnp. it looks like everything was pretty much contained. to a certain amount which was

rumored to be fine. looking at the balance sheet of the banks, they have provisions, 934 million euros where they should be well covered. also, the sources are saying to the "new york times" that commerzbank's case is not that severe as bnp paribas. commerzbank is cooperating with the authorities and also is said not to have circumvented those sanctions in a fraud ewe leapt way like bnp paribas was doing. that is most likely why we see see a fine which is far below those 9 billion u.s. dollars we know seep for bnp paribas. but all that aside, commerzbank will probably be the bank to see the next settlement.

500 million euros is a lot of money, though, for the bank. analysts are quite divided on that this will have an effect on their profit and loss accounting, as well. it could have an effect on their p&l because commerzbank is not very comfortable right now. only last year, the bank made 78 million euros only so a 500 million fine is a huge market loss at that profitability level. also, this year, the bank is still escaping its problems to wind down shipping assets, so they don't have a dividend to scrap because they don't pay a dividend right now. so they don't have a lot of financial leeway in case that fine should be higher than the legal provisions they have already on their books.

with that, back to you. >> more complications for the bank. i just want to point out the trading session today, as you can see, down 3.8%. so investors are certainly a little disgruntled in the session today. in other news, walmart's ceo says the companies may be hiring again, but that's not spurring consumer spending. customers have changed their shopping habits, which is not the best things for a retailer. they're splurging on events such as back to school. walmart's first quarter profit fell 5% and its forecast in weak second quarter results. s&p says boeing could face credit risks. boeing is the largest u.s. export by sales and it provides on the agency to provide loan

guarantees for some of its jet sales. boeing's credit arm would have to credit an extra $7 billion to $9 billion if they don't authorize the bank's charter by september. gm has been issuing a recall of nearly 1.8 million pickup truckes and suvs for brake line issues, despite the fact that u.s. safety regulators have been investigating the matter since 2010 and have received around 1,000 complaints. the "new york times" says the vehicles include the chevy silverrado. last week, subaru recalled thousands of vex in the u.s. for the same issue. gm is trading in the german market session right now, outperforming the broader market down around 0.25%. still to come on the show, san francisco attempts a clamp down on a parking start-up. i speak to the ceo of parkmobile

right after the break.

welcome back to "worldwide exchange." sterling is under a little pressure this morning after the latest data showed a surprise drop in uk factory output in

may. output dropped by 1.3% since january last year. that's in contrast to expectations of a rise of 1.3%. we're seeing sterling down by a rise of 1.40 picks. we've got testimony of nemek chafik, and we've got the bank of england for thursday, too. so a number of things still to watch on the uk front this week. alcoa reports second quarter results after the u.s. closing bell unofficially kicking off earnings season. the aluminum giant is forecast to earn 12 cents a share up from 7 cents a year ago. investors will be listening for comment on the global aluminum demand as well as the aerospace sector. alcoa stock has been on a tear of 15 % he since the fist quarter and up 38% for the year.

funds profits have fallen sharply due to weak demand in china and europe due to increased competition from the low cost smart competitors. the second quarter operating profit is down between 22% and 26% compared to the same period last year. it's the third down pick in a row. it's blamed the strength of the korean won for hurting its bottom line. san francisco has given rome based start-up monkey parking until friday to stop operations in the city or face stiffer penalties and further legal action. dennis herrerah says the app which allows drivers to pay for other drivers on parking spaces is illegal. this is the latest in a series of parking spot apps. sherry, from parkmobile usa,

explain to us how this works and what the benefits are to consumers. >> absolutely. good morning. parkmobile is an app that consumers across the united states use to simplify essential daily activity, parking. with park mobile, you initiate and pay for a parking transaction with your mobile phone. there's no need to swipe a card, to sfeed coins tot meter or to return to a car to display. if the weather is bad, or while walking to a meeting, and we even send an alert 15 minutes before each parking session is about to expire and consumers can extend the parking time remostly without the need to return to a meter. >> are we talking about public car spaces only or does it incorporate private? and how do you make money? >> well, great questions. parkmobile's primary customer res cities, so traditional,

municipal on-street parking like in washington, d.c., houston, los angeles. we work with universities like stanford, georgia tech, ohio assist. the service is available at transit lots and at urban garages in the united states. it works at an off-street environment. how do we make money? >> yeah. >> well, parkmobile is consumer funded. we are an alternative means. you can always pay at the meter, but consumers pay us a transaction fee of 35 cents to 45 cents generally to park with park mobile. and for that fee, we process the payment transaction and we post that parking session into the enforcement database so the officers who are handing out citations will know that you have parked using your mobile phone. >> now, san francisco is

allowing people to buy and sell effectively parking spaces that they're in and they're going to leave. was your take on this? surely this kind of disrupted technology should be regulated rather than banned. >> yes, well, from parkmobile aes perspective, we worked w municipalities and the municipal at that times contract for us to provide the solution to their consumers. i think some of the newer solutions for people selling their parking spaces that they're in are quite interesting, but they are causing a bit of an uproar with the authorities. so i think they want to control their entire parking environment and the consumer experience. >> if they could get money from it, they would be fine. if they could take a cut of the money, they would be fine, do you think? >> well, you know, i'm not sure because from our perspective, the municipal at that times are not looking for a cut of the fees that consumers pay us. i think they're more interested in promoting access for all

consumers, which is why we have payment needs for cash preferred consumers as well as consumers who want to pay with traditional debit and credit cards. so the municipalities have a larger objective. >> great to chat with you. now we'll leave you with a look at how the futures are trading ahead of the equity markets open on wall industry.

welcome back to "worldwide exchange." commerzbank shares under pressure on reports the german lender has begun settlement talks with the u.s. over possible sanctions violations. walmart's top executives say the u.s. jobs market may be improving, but that's not giving consumers enough confidence to open up their wallets and spend more. the u.s. senate plunges back into the debate over high frequency trading, holding another hearing today on the impact this may have on the markets. airline stocks drop as air france slashes its earnings guidance. the carrier says numbers are being hit by overcapacity on long routes and weak cargo demand. >> announcer: you're watching

"worldwide exchange," bringing you business news from around the globe. if you're just tuning in, thanks for joining us here on "worldwide exchange".. a look at the futures this morning, we've got the dow indicated lower by around 20 points. we've got the s&p around 2 or 3 points and the nasdaq similar story around 2.5 points. we did see losses in the session yesterday between 0.4% for us s&p and 0.8% for the nasdaq. the focus was on the russell 2k. that did see a pullback of 1 is.8% in the trade, actually the worst day since april the 25th. we've got fed speak, consumer confidence and alcoa unofficially kicking off their earnings season. let's look out to the european markets this morning, too. we've got losses between 0.5% and 0.6% right flower for the core markets, weaker export and import data from germany this morning. the airlines stocks certainly weighing on the markets after

air france slashed its guidance. how do you make money on these markets? listen in to what some experts have been telling us. >> what's interesting is you have to look for the emerging dividend pays. i think what's interesting, you hear the story about the technology companies and the importance for dividends to investors. it was interesting to note that the majority of the retailers that joined the 53/50 in the latest reshuffle have committed the quality. >> now since the s&p climbed by more than 1% in a day. it's slowly higher. and i think we're going to have more on the same. until we get to the point where the policy gibbs to change or the anticipation that monetary policy is going to change.

now banks are interesting. they've become valuable opportunities. the question is, when we started the lows out on bank of ireland, is the value opportunity, the risk opportunity so great that actually there's so much risk priced in that you can now start with the value? >> u.s. chain store sales out at 2:25 eastern this afternoon. as the weather improved, so did more traffic, but how much of an effect will it have? joining us now from new york, great to have you on. what are your specation expecta sales this month? how does it compare to last year? >> we're looking at a 4.7% growth rate for the month of june, stronger than last year's 3.8%.

walmart and walgreen have already reported and it's weaker than last yeef's 3.4%. however, 4% is actually robust. despite the fact that, you know, we are facing the very difficult comparison. so it's a really good sign. now, as you mentioned, as the weather improves, so did traffic. however, analysts saying a little bit worried because a lot of it had to do with discounting towards the end of the month. to the fourth of july, which is part of the cycle. so we're very cautious on what we're keeping a good eye on today whether they gave us any indication of increasing or lowering in the second quarter. promotional activity and events declare some of that inventory. what impact can that have on margins as we look more broadly in q2 overall. >> overall, we have a lot of negative guidance from the second quarter from retailers.

if we do see a lot of discounting, it could hurt margines. we could continue to see that because right now retailers could order that inventory for the back to school season, which is towards tend of july, beginning of september. so what we're going to see is that second quarter sales are going to be about 1.3%. then they might improve them to the third quarter because of back to school season. one thing thompson reuters shows is that no heart how the economy changes, back to school picks up in markets for us. >> gap has some tough comparisons. we heard from walmart, the top executive there saying look, the situation may be getting better, but people aren't spending. what's the deal with these two names? >> when you look at walmart, their consumer is the low end

consumer and they're turning down to the discount scores. and then you look at gap, they're more to the middle class consumer which right now are being very price organic. so they have to be very careful in order not to give everything away. they have merchandise right now and they're trying to clear that out before the back to school season. and analysts are cautious about that. however, they did have a very good, solid beginning of the quarter. so it's going to be interesting whether they increase or keep the earnings project jobs for the second quarter today. >> yeah, we have to watch that. for now, let's take a look at today's other stop stories. u.s. regulators look to be turning their sights to germany on a crockdown of sanctions busting by some of europe's biggest banks. state authorities have begun settlement talks over dealings with iran and other countries that have been sanctioned by the u.s. the "new york times" said the bank could be facing a fine around $500 million as part of the settlement. now, philips has warned

investors i said second quarter earnings at its health care divisions will miss forecasts. the firm announced the ceo of that unit is stepping down. the ceo said the performance of the division has been disappointing, adding that he would be implementing a new management structure in health care to improve the performance. air france has cut its guidance, the carriers face this year could be 12% lower than previously expected. mainly as a result of overcapacity on its passenger routes as well as weak cargo demand. air france reported traffic figures which showed passenger capacity up by 1.8% in june. the firm says that the bookings for july and august showed the trend continuing on its long haul flights. and shares trading lower bringing down other airline stocks in sympathy. iag, the underperformance today down almost 5%, but also easyyet and lufthansa losing ground. elsewhere, box has

reportedly raise $150 million in funding from tpg. "the wall street journal" says the move will allow box to consider an ipo which has been delayed. box now intends to go public sometime this fall. coming up, the u.s. economy continues to ax jobs. walmart is taking a glass half empty view on that. hear what they have to say about the health of the consumer, after the break. we needed 30 new hires for our call center. i'm spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast? go to ziprecruiter.com and post your job to over 30 of the web's leading job boards with a single click; then simply select the best candidates from one easy to review list. you put up one post and the next day you have all these candidates. makes my job a lot easier. [ female announcer ] over 100,000 businesses

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welcome back to "worldwide exchange." these are your headlines. walmart says americans are keeping their wallets shut tight. a u.s. senate hearing begins today on high frequency trading and hammer volumed rocket fire following israel's bombing raid on the gaza strip. walmart is considered a bellwether for the u.s. economy, accounting for around 10% of all retail sales. one of the company's top executives is weighing in on gloomy comments about the u.s. consumer.

bertha coombs has all the details. >> good morning, julia. walmart's u.s. ceo says that the companies may be hiring, but the improving job market isn't spurring consumers to consume more. the middle and low income customers appear to change their shopping habits, which is not the best thing in the world for are ae tailor. he says they're splurging on events such as back to school and holidays like july 4th, but they are pulling back in between. about one in five of walmart's customers relies on government assistance to buy groceries and other goods. he says, quote, people think we do better in dune economy. we don't. we do better when gdp is growing, when the economy's good and we really need that in the long run for the business to improve. walmart's first quarter profit fell nearly 5%.

the company's forecast weaker than expected second quarter results citing the continued financial struggles of its lower economic customers, among other things. "the wall street journal" reports since taking over in february, the new ceo has directed management to speed up the launch of new score concepts and online strategy toes gain back market share. this year, walmart will open more smaller convenience and grocery-type stores than super center stores, which also will act as sites for customers to pick up items that they bought online. the journal says on its website, walmart has quietly scrapped its every day low prices model seen throughout its brick and mortar stores. instead, prices change based on fluctuating data and competitive offers. last year, walmart plowed ahead

of amazon and opened up three new online performance centers and offerihiring 1,000 employee silicone valley. this is really big now, buy it on-ryan and pick it up in stores. they maybe hope while you're in store you pick up something else. >> we've got click and get it here and i use it all the time. bertha, have a great day. thanks for that. consumer crumb cup cakes went public a few years ago. it was founded in 2003 and went public in 2011. the firm will close around 65 stores in the u.s. days after it was delisted from the nasdaq. if you consider this the moment the cup cake bubble popped,

we've been asking what the the next fashionable food product be? josh tweets in to say i pray that it has something to do with bacon, i agree. or cheese. i like cheese. now, as far as celebrity brand power goes, the kardashian sisters are a force to be reckoned with and they have just released the latest collection of the kardashian kids clothing line for the u.s. chain babies r us. speaking for closing bell, the sisters explain the idea behind the closinging line. >> i think we were really wanting to bring fashion and high fashion to a baby's line, but still keep it really affordable. and, you know, courtney started. when we thought of the line, she was pregnant with penelope. so she had a really big hand in designing our first collection. now since i've been my baby, i

really understand how important it is to have pieces that are extremely functional, a certain kind of fabric. so you kind of have it all mixed in. >> they allowed us to keep our clothing at an affordable price, which was one of the most affordable things to us, and still trusted in us and believed in us to have these high fashion pieces. so i think it was a perfect fit. and you can head over to cnbc.com to catch more of that interview. and looking to run the world? maybe the beyonce studies will help. the university of victoria will offer the course on the pop diva. she quickly said the school had to work it out and have more spots. how long does that take?

not three years. still to come on the show, the official start to the u.s. earnings session kicks off this week on friday. stay tuned acid we ask what stocks should you be watching?

samsung's operating profits falls. >> operating profit was at 7.2 trillion yuan, down 25% year on year. this is a significant drop from its 10.2 trillion yuan in the third quarter of last year, which was its peak. this is also its third straight quarter of declining profit. ref knews for the second

quarter, down 10% year on your. anything below 8 trillion yuan in operating profit was seen to be an earnings shock and samsung has admitted that this is true as the numbers are much bigger expect ages. again, this drop is coming from weaker sales from its mobile business which continues to see stiffer competition, both by apple to the upside and chinese manufacturer to the downside, including manufacturers like lenovo. a strong yuan didn't help out, either. what samsung says for outlook in the third quarter is it is expecting a recovery. they also hinted that its new product will be coming out and this is expected to help the third quarter numbers, as well.

also, a stronger yuan, which one was of the main factors in second quarter's earnings expectations miss is seen by samsung to be less of a concern for the third quarter. >> well, let's take a look at the u.s. futures ahead of the u.s. equity market open. the dow around 17 points right now in the nasdaq around 1.5 points. so actually, we're losing some of the losses, we're gaining as we head towards that equity market is session. we did lose ground in yesterday's trading session, down 0.8% for the nasdaq. the s&p losing 0.4%. a lot of focus on the russell 2k losing around 1.8% in the trading session. the worst days we've had since april 25th. of course, alcoa reporting second quarter results after the u.s. closing bell and officially kicking off earnings season. the aluminum giants is forecast to earn 12 cents a share up from 7 cents a share a year ago, but

revenues expected to drop 4%. alcoa stock has been on a tear. it's up 16% is since the end of the first quarter and up just over 38.5% for the year. joining us from mshg, director of research at thompson reuters. thanks to earnings provisions, earnings in the last quarter have been nearly 3% higher than forecast at the end of the earnings season. can we expect the same in q2? >> stock advisers do not expect too much from them in the second quarter. today, in terms of preannouncements, we've received 97 negative preannouncements and only 24 positive. and as a result, we've seen that analysts have become bearish on the quarter and they have been lowering expectations from 8.5% from the beginning of the quarter to 6.2% today. however, that is improvement from the previous quarter that was at 5.6%.

and so in terms of winners and losers, what we're looking at is the technology is expected to see double didn't growth of 12.3%. then we're seeing a boost from semi conductors and services and energy materials are expected to do well because of comparisons. on the flip side, we're only expecting to see two sectors see a decline in earnings where financials sector taking the biggest decline at 2.7%. high mortgage rates have been appearing and as a result there has been less refinancing activity. that's why the sector has been weak. but what's interesting is consumer staples because analysts have become bearish. walmart is being hurt the most because of unemployment. they're trading down to the dollar stores. and the middle class consumer is

now shopping at amazon. >> my second margin question for you, what do you think about marmgins right now? i've read aggregate margins could reach a low in two decades now. is that what you're expecting, too? >> yes. for the second quarter, that is correct. what's interesting is this is expected to be the last quarter of single digits earnings growth rates for the s&p 500. analysts are optimistic for the next four quarters. we're expecting to see double digit growth for the next four quarters. even when you look at the s&p 500, in terms of rates, 15.7 is stronger than the long-term average at 14.9. analysts, we believe that if the economy in the united states could improve in the second quarter and they're optimistic about it. >> i've heard a lot of skepticism about that, double earnings growth in q3 and q4. expectations come low as we approach. so who knows. but thank you so much for your update.

let's bring you up to speed on what's on today's agenda in the united states. we've got richmond fed approximated jeffrey lacker, he'll be speaking about the economy at 1:00 p.m. eastern. at 3:00 p.m., we're going to get may consumer credit figures. alcoa was just discussing their results. that comes after the close today. we've got numbers from bob evans and the container store. the banking committee holds a hearing into the role of high frequently trades in the market. the ceos are intercontinental exchange and, in fact, global markets are expected to testify. we can give you another quick look at the u.s. futures as we head towards the end of the show and the beginning of the u.s. trading session. a few hours yet, but we are gaining grounds, indicating lower as we head towards the beginning of that session. that's it for today's show. i'm julia chatterley. thanks for watching "worldwide exchange." for now, have a great trading day. about speeds and feeds.

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good morning and welcome to "squawk box." global markets are following wall street's lead. walmart's chief says the recovery in the job market is not sparking more consumer confidence in spending. and washington state is about to become the second state to allow people to buy marijuana legally, dude. it's tuesday, july 8th, 2014. "squawk box" begins right now.

>> good morning and welcome to "squawk box" here on cnbc. i'm michelle caruso cabrera along with joe kernen and scott wapner. becky and andrew are off today. stocks take a run after yesterday. on the corporate front, we're going to hear from alcoa, bob evans and the container store. as is for the economy, 7:15 eastern time, the survey of small bus sentiment. at 10:00 a.m., the labor department releases labor turnover survey. this afternoon, the consumer credit data comes out. we're going to have more on the markets in the next half hour. deutsche bank's david vianco and jim russell of u.s. bank wealth management.. first, though, skos scott has some of the morning's top stories. the ceo of walmart says the improving employment picture